Avoiding Business Blunders: Tips for Entrepreneurs and Business Leaders

Business disputes can be disruptive and very expensive. Whether choosing a new partner, considering a merger or guiding a client as they start or grow a business, there are many things you can do to prevent problems. As a former litigator, investment banker, CEO and board member, I have had the opportunity to see many situations that either could have been avoided or should have been resolved much earlier, saving a great deal of time, money and stress. Success in business hinges on careful planning, smart decision-making and avoiding common pitfalls that can derail your efforts. Over a series of posts, I will provide tips to help you navigate key aspects of business management, from drafting agreements to building your team. If a problem does arise and you find yourself involved in a dispute then, as a mediator, I want to help both parties end the conflict and find a productive way forward. 

Red flags to watch for when choosing a business partner or making a key hire: 

• Make sure that business partners have the same or similar financial needs, goals and commitments. Someone who does not have the same strong need for the business to succeed is unlikely to have the grit, determination and “fire in their belly” that are often required to handle the many challenges that businesses experience.
• Are they proud of, and boast about, situations when they were able to “get one over” on a former colleague or partner? Beware, because you don’t want to be the next person they talk about.
• When they talk about their career or personal relationships, is there any indication that they are vengeful, spiteful, litigious, quick to anger or unable/unwilling to recognize and admit mistakes; lack self-awareness; feel entitled; or are always the victim? These traits are unlikely to change and could lead to problems.
• Are they honest about all things, even those that may not be important (i.e., the example of someone fudging golf scores, failing to return change when a checkout clerk makes a mistake, or bragging about improperly evading the IRS)?
• When you have a meal with the potential business partner (and I suggest having several before making a decision), are they courteous to restaurant staff? How do they handle mistakes that might have been made by servers or the kitchen staff? Generally, are they nice to people who are providing a service or have less power/influence? If you see signs that the person lacks self-awareness, feels entitled or is simply not very nice, then pay attention. Do you want to be “married” to that person in your business?
• Once people start to get too technical, hyper-legalistic or demanding with their negotiations, end them. Relationships that start out this way don’t generally get better.
• Does your potential partner make indiscreet remarks about others? Expect them to make those types of remarks about you.
• Do they have longtime friends and business associates with whom they keep in touch? If not, then pay attention. You don’t want to enter into an important relationship with someone who consistently burns bridges or leaves a trail of damaged relationships as they move from one opportunity to another.
• What is your potential business partner reading, watching and inspired by? This can tell you a lot about their values and goals.
• If you know from the start that you won’t want to spend a lot of time (long days and nights) with the potential partner, then don’t expect to look forward to the closing dinner with them after several challenging years working together.
• Anticipate and assume that conflicts and hostilities will arise. If you are surprised when they do inevitably occur, then you have only yourself to blame.

I will periodically be sharing ideas and tips gathered over several careers and numerous experiences (both good and bad). A few of these tips were given to me, and some are general business wisdom or sayings we have all heard, but many of them are my own. Avoiding disputes, or ending them quickly once they arise, will make it much easier to increase the value of your company and ultimately succeed, however you define that goal. 

^{Disclaimer: The content is intended for general informational purposes only and should not be construed as legal advice. If you require legal or professional advice, please contact an attorney.}